The UK Government has passed the National Security and Investment Act (NSIA), introducing a whole new national security vetting regime.
This will have a major impact on investments in sensitive sectors and technologies and may affect how acquisitions and investments in any sector proceed. Businesses should be factoring the changes into their acquisition and investment plans now.
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UK NATIONAL SECURITY AND INVESTMENT ACT 2021 (NSIA): New Regime For Screening Transactions For National Security Risk
The NSIA received Royal Assent on 29 April 2021. It will usher in a new stand-alone national security vetting regime that will replace existing powers to scrutinise mergers on national security grounds. The Secretary of State for Business, Energy & Industrial Strategy (BEIS) will be the key decision maker, with significantly expanded powers to scrutinise and, where necessary, impose remedies on certain acquisitions and investments that have national security implications. The new regime will apply to investments/acquisitions by investors from any country, including the UK, and without any form of minimum turnover threshold or market share safe harbour.
It is expected that the new regime will operate from the end of the year, when secondary legislation brings the NSIA fully into effect. Once operative, however, the NSIA may be applied retrospectively to certain transactions completed between 12 November 2020 (when the Bill was introduced to the House of Commons) and the commencement date.
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